June 28 (Bloomberg) -- Sony Corp. sold almost $13 million
in video and medical equipment to dealers in Dubai that resold
the gear in Iran, the company said. The recipients included
groups under U.S. sanctions.

In a U.S. filing yesterday, Sony said it sold broadcast
equipment, security cameras and video-conferencing gear to
dealers who planned to resell or resold the products to groups
including the Information Technology Department of the Iranian
Police and the Islamic Republic of Iran Broadcasting.

The sales appear to be sanctionable, said a U.S. official
who asked not to be identified because he wasn’t authorized to
speak publicly.

The law allows the U.S. to seek fines against suppliers of
products used to oppress people in Iran. Sony’s dealings were
outlined under requirements that businesses report transactions
with Iran or others sanctioned under programs relating to
terrorism or the proliferation of weapons of mass destruction,
according to the Tokyo-based electronics maker’s filing.

“International companies that sell equipment to designated
Iranian entities like IRIB run the risk of U.S. sanctions as
well as the moral opprobrium from aiding the regime’s repression
of the Iran people,” said Mark Dubowitz, executive director of
the Foundation for Defense of Democracies, a Washington-based
group that researches international terrorism. Dubowitz has
advised Congress and the Obama administration on Iran sanctions.

Possible Penalties

Sony “believes that, and maintains policies and procedures
designed to ensure that, its transactions with Iran and
elsewhere have been conducted in accordance with applicable
economic sanctions laws and regulations,” according to the
filing. Penalties or sanctions taken against the company could
be material if any government disagrees, Sony said.

The company declined to comment beyond the filing, Ryoko
Takagi, a spokeswoman for Sony in Tokyo, said by phone today.

John Sullivan, a U.S. Treasury Department spokesman,
declined to comment on specific companies and possible
investigations. Companies can get a special permit to sell to
Iran, he said, and some medical equipment is exempt from the
U.S. sanctions.

Sony American depositary receipts closed little changed at
$21.19 in New York. In Tokyo, the stock rose 2.1 percent today
to 2,078 yen, compared with a 3.2 percent gain in Japan’s
benchmark Topix index, and has more than doubled this year.

Tailored Sanctions

Since Sony is based in Japan, it’s not clear the company
violated any provisions of a U.S. law meant more to capture
domestic businesses with overseas subsidiaries, said Danforth
Newcomb, an attorney in the sanctions practice at the law firm
Shearman & Sterling in New York.

“It turns on a lot of the detail and careful reading of
what they did,” Newcomb said. “The U.S. has adopted extra-territorial sanctions designed to reach non-U.S. persons but
those sanctions are considerably more tailored because they have
significant foreign-policy ramifications.”

One dealer was a subsidiary of the Islamic Republic of Iran
Broadcasting, Sony said in the filing. The company also reported
sales of medical instruments -- including printers, paper and
monitors -- it said were intended for the Ministry of Health.

Sony said it made the disclosure under the Iran Threat
Reduction and Syria Human Rights Act of 2012 and related
amendments to the Securities Exchange Act of 1934.

The company said it registered a profit of about $500,000
from the sales.

Mitsubishi UFJ

Japan, the world’s third-largest consumer of oil, has
struggled to balance its approach to Iran against its dependence
on foreign sources for oil, especially after the Fukushima
nuclear accident in 2011 forced the closures of all but two of
its 50 atomic plants.

“Iran is an important country for Japan, especially since
the Fukushima disaster,” said Osamu Fujisawa, an independent
energy economist in Tokyo. “I don’t think it’s paying much
attention to other goods.”

The U.S. extended Japan’s exemption in March from sanctions
on banks doing business with Iran for a third six-month term as
oil purchases declined. In the first five months of the year,
Japan’s oil imports from Iran declined about 17 percent from a
year earlier.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank
by market value, agreed last week to pay $250 million to the
state of New York to settle claims it transferred billions of
dollars for countries facing U.S. sanctions including Iran,
Sudan and Myanmar.

Cisco, ZTE

Last year, San Jose, California-based Cisco Systems Inc.,
the largest maker of networking equipment, ended a partnership
with ZTE Corp. amid concerns about the Chinese company’s alleged
sale of equipment to an Iranian company.

Zhu Jinyun, ZTE’s senior vice president for North America
and Europe, said at a Sept. 13 congressional hearing that the
company conducts “normal business operations in Iran” and is
“gradually reducing our present operations and we are not
starting any new business operations in Iran.”

Zhu also said the company hasn’t sold gear to the Iranian
government.

Amsterdam-based ING Groep NV agreed last year to pay $619
million to settle U.S. charges it falsified financial records to
bypass sanctions on countries including Cuba and Iran, the unit
of Amsterdam-based ING Groep and the U.S. Justice Department
said. Credit Suisse AG in 2006 paid $536 million to settle
similar violations.